LSB Industries Inc., Oklahoma City, said on April 28 that it has
entered into an agreement with Lapis Energy, Dallas, to develop a project to
capture and permanently sequester CO2 at LSB’s El Dorado, Ark. facility.
The project will commence immediately, subject to the approval of a
Class VI permit, with expected completion by 2025. The sequestration will
enable LSB to produce over 375,000 mt/y of blue ammonia.
“We are very excited to partner with Lapis and take our first step
to becoming a supplier of low carbon or blue ammonia – allowing us to
participate in what we believe will become a large future market,” said Mark
Behrman, LSB President and CEO. “This project is very compelling for us from
both environmental and commercial perspectives.
“Carbon sequestration is a proven means of reducing greenhouse gas
emissions from ammonia production, and our El Dorado facility is uniquely
located above deep geological formations with the capacity to sequester decades
of CO2 production from the plant,” he said. “Our customers,
particularly our industrial customers, need solutions to help them decarbonize
their supply chains, and low carbon feedstocks represent an attractive
opportunity to accomplish this goal in the near-term, while technologies for
more sustainable no carbon or green ammonia production continue to become
economical.”
Lapis, backed by Cresta Fund Management, a Dallas-based
middle-market infrastructure investment firm, will make 100 percent of the
capital investment required for the project development. LSB said this is the
first carbon capture and sequestration (CCS) project announced in the state of Arkansas,
and the third CCS project from ammonia production in the U.S.
Lapis, founded in 2020 by a team of industry experts, is a vertically
integrated energy infrastructure development firm focused entirely on
decarbonization through CCS.
Once operational, the project at the El Dorado site will initially
capture and permanently sequester more than 450,000 mt/y of CO2 in underground
saline aquifers, with the potential to increase this quantity based on
potential debottlenecking projects at the facility. This will be equivalent to
permanently removing approximately 109,000 passenger cars from the road, which
represents approximately 11 percent of the cars registered in Arkansas.
The permanently sequestered CO2generated from the
facility’s ammonia production is expected to qualify for federal tax credits
under Internal Revenue Code Section 45Q, which are currently $50/mt of CO2captured beginning in 2026, but under evaluation by Congress to increase
the 45Q tax credit to $85/mt of CO2.
Once in operation, the sequestered CO2 will reduce LSB’s scope 1
GHG emissions by 25 percent from current levels.
“Lapis is the perfect partner for us in our initial low carbon
ammonia project given their significant experience and knowledge in the clean
energy space,” added Behrman. “We are pleased to be working with them as we
begin what we expect to be the first of several projects that will position LSB
as a leader in the decarbonization of hydrogen and ammonia and generate
significant long-term value for our shareholders.”
